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Sales of Microsoft Surface stagnant despite new launches

Microsoft Surface may be moribund but Officer 365, Azure and Xbox all posted strong growth

Microsoft's latest quarterly earnings showed that the Surface lineup raked in $1.3 billion over the final quarter of 2018 - Microsoft's fiscal second quarter.

That figure is little different from the same period in 2016, and comes despite the belated launch of three new models during 2017. These launches include the Surface Book 2, the new Surface Pro, and the Surface Laptop, which were all available in the last three months of the year.

It was the most expensive models, such as the Surface Book 2, that enjoyed the best sales, though, probably because both models offer powerful hardware encased in a unique 2-in-1 design to appeal to creatives who don't want a MacBook.

Office 365 posted a 12 per cent and a 10 per cent rise for consumer and commercial use, respectively, but the stand-out performer came from Azure, where Microsoft claimed a 98 per cent jump in revenues.

Thanks to this cloud sales surge, Microsoft generated overall second-quarter revenues of $28.9 billion, with a net income of $7.5 billion, a 12 per cent year-on-year increase.

CEO Satya Nadella was naturally delighted. "This quarter's results speak to the differentiated value we are delivering to customers across our productivity solutions and as the hybrid cloud provider of choice," said Nadella.

He continued: "Our investments in IoT, data, and AI services across cloud and the edge position us to further accelerate growth."

One surprising result, perhaps, is the eight per cent hike in Microsoft's gaming revenues, seemingly being attributed to sales of the Xbox One X, which helped drive a 14 per cent increase in Xbox hardware revenue.

This came despite Xbox playing second fiddle to Sony in the console market, while Nintendo's Switch was the unexpected hit of the year.